Two-thirds of CIOs believe strategic use of IT is critical to a business’s ability to innovate, according to a recent survey by Capgemini Consulting. But the same survey also revealed that only 25 percent of CIOs feel their IT function is actually driving business innovation. So why aren’t more IT departments supporting business innovation effectively?<br/>

Paul Hollingsworth, Celona Technologies

05/19/2008

Share

Two-thirds of CIOs believe strategic use of IT is critical to a business’s ability to innovate, according to a recent survey by Capgemini Consulting. But the same survey also revealed that only 25 percent of CIOs feel their IT function is actually driving business innovation.So why aren’t more IT departments supporting business innovation effectively?Because many CIOs and IT departments are busy just keeping IT running and measuring performance against vital key performance indicators. Often IT is seen as a cost center that needs to be measured, optimized, and controlled rather than as the powerhouse of business innovation. And CIOs may have little time or budget to innovate, due to the fact that such a large chunk of existing IT budgets, resources, and staff are committed simply to keeping legacy infrastructure running.Industry research studies have shown that it’s not unusual for a company to devote as much as 70 percent of its IT budget to operating and maintaining legacy systems. The “double whammy” of maintaining this legacy infrastructure is that it is no longer aligned to business need and impedes much-needed innovation.If you want to re-align your IT infrastructure to match business needs, you have two primary choices:••While the second approach will yield the most benefits in the long run, in practice it’s the first approach that most companies have taken. This is because migrating mission-critical applications and their associated data is risky and difficult, and such projects have a poor record of being delivered on time or to budget. Many enterprises have therefore naturally shied away from attempting such projects, although the compounded effect of using a tactical approach to solve legacy IT problems over a number of years is the unbelievable complexity that is now responsible for sucking IT budgets dry.This brings us back to the seemingly intractable‘chicken or egg’ conundrum of innovation versus operation. A solution to this problem is offered by the new generation of application migration technology that is coming to market. So-called “third generation” migration solutions are very different from preceding generationsof migration technology. Notably, they are highly adept at dealing with the thorny problem of business logic held in legacy systems and are flexible enough to enable “business-driven” migrations. CIOs that have employed this technology have achieved business-driven application migration and consolidation projects on time and to budget. They are benefiting both from a lower legacy infrastructure cost and the ability to offer new products and services to their customers—supporting innovation and opening up new revenue streams. Take early adopter BT, for example, which wanted to move a legacy a billing system to a new technology platform without interrupting business operations. It achieved a successful migration in just six months (a full 13 months ahead of schedule) using a third-generation migration tool. BT Retail has since credited the successful project with creating more than 148 million euros in new revenues, thanks to its ability to launch innovative new customer services. Third-generation migration technology could be the CIOs best friend—the key to unlocking the budget and resources trapped in legacy systems, by enabling effective, low-risk application migration and consolidation. And, by significantly reducing both the risk and cost of consolidating and renewing legacy infrastructure, it allows more resources and effort to be targeted at innovation.Paul Hollingsworth is director of product marketing at third-generation migration specialists Celona Technologies .

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.